Asian stocks appeared set for gains following a strong session for US equities, boosted by indications that President Donald Trump's trade measures might be less severe than anticipated.
Futures pointed towards increases for Tokyo and Shanghai indices, with Sydney also seeing a slight uptick upon opening. Meanwhile, Hong Kong was expected to see a decline. The US market's optimistic sentiments benefited a wide range of stocks, marking a turnaround from a recent sharp downturn that challenged the perception of US economic strength. The Nasdaq 100 surged by 2.2%, with bonds and gold prices falling, while the dollar's performance was mixed.
The market saw a notable rally in major tech companies, including Tesla Inc. and Nvidia Corp., which helped offset concerns about high valuations that had led to the worst quarterly performance for big tech firms since 2022.
Investors, worried about the potential consequences of a full-blown trade war, found some reassurance in the prospect that the impending US tariffs might be more targeted than previously suggested by Trump. The president hinted at possible exemptions or reductions for trading partners on Monday.
Ivan Feinseth of Tigress Financial Partners expressed optimism about the market's outlook, anticipating a continued rally from oversold levels and viewing any reduction in tariff impact as a positive catalyst. Despite the likelihood of increased volatility at the start of the next month based on Trump's tariff policies, Feinseth believed that the worst of the market pullback had passed.
Major US indices, such as the S&P 500 and the Dow Jones Industrial Average, posted gains of 1.8% and 1.4%, respectively. Additionally, chipmakers and tech giants experienced notable increases in their stock values.
The 10-year Treasury yield climbed by nine basis points to 4.33%, while oil prices rose following Trump's announcement of a planned 25% tariff on countries importing crude oil and gas from Venezuela.
Thierry Wizman from Macquarie remarked on the recent developments, suggesting a shift towards a more organized and rational tariff policy by the US government, coupled with negotiations and concessions from targeted nations to secure exemptions from reciprocal tariffs.
Trump's declaration of April 2 as a "Liberation Day" marked the beginning of a more protectionist trade policy aimed at addressing what he perceives as unfair trade practices by US trading partners. Countries facing US tariffs have rushed to engage in discussions with Trump administration officials in hopes of securing exceptions from the imposed tariffs through concessions and other defensive measures.